Carmel: Leadership in Action, Part Three

This is the third and final installment in my series on leadership in Carmel, Indiana. Click to read Part One and Part Two. This one is dedicated to the critics.

Like any leader, Carmel and Mayor Brainard have had both those who’ve strongly praised them and those who hate them. That’s ok. Leadership itself often polarizes and every good leader has been besieged by critics. Of course, not all leaders lead in the right direction and sometimes the critics are right. So let’s listen to them.

Criticism falls into three main categories:

The mayor is an elitist. There are two flavors of this. One flavor says that he’s engaging in “economic cleansing” by running the less well off out of town. The other is that he’s trying to make Carmel into some elite city, but fundamentally Carmel doesn’t have what it takes and his attempts will come crashing down.

The city is spending like a drunken sailor and borrowing money at a rate that is going to sock the taxpayers with a huge bill, often on wasteful projects.

Mayor Brainard and his cohorts are engaing in cozy or unethical schemes to recycle taxpayer dollars into their own pockets.

Let me try to address these in turn.

Is Carmel Elitist?

As I talked about in my opening paragraph of part one, Carmel has long had to deal with the perception of being elitist, even though it has many modest income people within its borders. Recently the rhetoric has been turned up because of a perception that the mayor wants everything to be high end and only for the wealthy. This was most notably brough to the fore when the city considered, and rejected, a plan to ban vinyl siding for new homes. And again recently when the Gramercy development was approved, replacing 500 moderate income, older apartments with luxury homes and condos.

There’s no doubt that the city has embarked on a program to offer a product that is differentiated by being high quality. This has the effect of prohibiting lower end, cheaper development. What’s more, it raises property values. Anything that raises property property values definitionally reduces the affordability to those at the lower end of the economic spectrum. So any improvement in any town can be seen as elitist.

I personally don’t believe that the mayor is trying to run poor people out of Carmel. But I think it is fair to say he’s pushing Carmel towards a differentiated rather than a commodity strategy. That’s going to raise the attractiveness of the town, which will ultimately put redevelopment pressure on current affordable housing. There’s no two ways about that. This phenomenon is widespread across America, where even well-paid teachers, firemen, etc. who work in a town can’t afford to live there in some suburbs of major cities. I don’t see Carmel getting to that point. But older apartments and homes with lots of deferred maintenance will continue to be redeveloped. The answer to maintaining affordable housing is to continue to allow apartments and townhomes to be built. To the mayor’s credit, he has pushed for this, but in the suburbs building anything other than single family homes will alway have opposition.

The flip side of the argument is that Carmel wants to be elitist, but fundamentally is a pretender and that fancy things like the City Center and the Performing Arts Center will end up as while elephants because of the lack of a real upscale base to support them. I think this is a very poor argument. Carmel is actually much less upscale in terms of amenities than its income levels can support. Carmel has many wealthy people who could, should they desire to do so, support many high end establishments. What Indiana lacks compared to other places is a culture of high end consumption. That may not be a bad thing if you think about it. But if someone shows up selling items that are geared to the true connoisseur, and which may not have high brand awareness, it might not work in Indiana. So I think individual businesses or ventures may fail, but Carmel can definitely support most of what is being developed. These are proven models that have been implemented in other cities successfully.

Spending and Taxes

With regards to spending, debt, and taxation, it is difficult to separate truth from fiction. Local government finance is so complex, and taxes dependent on so many factors, that it’s futile to argue. It’s better to ask whether or not a particular is worth the money spent on it. So rather than debating $80 million in debt, for example, the real debate is over the Performing Arts Center itself.

A good chunk of Carmel’s debt has gone to pay for public amenities and infrastructure, especially parks and roads. For example, debt paid to build Hazeldell Parkway and is building the Illinois Street extension. With roads it is pretty straightforward: you are paying one way or another, either through your taxed to pay for proper infrastructure or through your time spend sitting in congestion if it isn’t built.

There are certainly projects that can be argued with. But rather than totaling up all the debt, then arguing about only a few specific things, better to just argue about the things themselves.

Cronyism

As for the idea that Mayor Brainard and his friends are getting rich, there’s no doubt that cozy financial relationships are the nature of the beast in government. That’s true anywhere. I’ve seen nothing that indicates that the Mayor has been unethical or done anything illegal. I’m sure that his supporters have participated in city projects. But who elese would he partner with on things like the City Center? His opponents? I think we have to accept that there’s just a certain level of cronyism that goes on in any organization, governmental, business, or civic. I see nothing that indicates anything out of the ordinary in Carmel. It may not be ideal, but it doesn’t seem out of line either.

So I think there is some truth in the critics’ views, but that they ultimately miss the big picture. Carmel isn’t perfect and there is certainly plenty of room to dissent from a lot of what is going on. The problem is that there seem to be few critics who are willing to engage in a reasonable discourse around that. Instead, Brainard-hatred seems to be akin to Clinton or Bush hatred. He’s seen as an evil man by some, a sort of devil incarnate whose every move is filled with malice. Brainard himself probably gets a chuckle out of that. By coming across as so extreme, his opponents marginalize themselves and actually help him by discrediting rational opposition. This is exactly how Clinton survied the Lewinsky scandal and Bush got re-elected despite the Iraq war. Having extreme critics is one of the best thing that can happen to a politician. If the critics didn’t exist, Brainard would have had to invent them.

A More Serious Critique

So what are my personal criticisms of Carmel? Let me list a few:

1. The natural boundaries of Carmel are those of Clay Township. The city should not have attempted to annex territory near Westfield in neighboring Washington Township. Some people have said the mayor never really wanted that territory, but only wanted to shake things up in Westfield. As I said earlier, this attempt was the best thing that ever happened to Westfield, but I think that’s a post-hoc rationalization. If the mayor didn’t want the Westfield territory, why does he continue to pursue annexation of a small sliver of it, the AMLI development, to this day despite losing repeatedly in court?

2. I have never been a fan of tax increment financing districts (TIF’s) and Carmel has started creating a lot of them. TIF’s work by capping the normal property taxes paid be commercial property in a given area. Any taxes from any new development goes 100% into the TIF, not to the city, the schools, etc. This money can be used to back bonds. The idea is that you bond out the anticipated revenues of the TIF and use that to jump start development in either blighted areas or in greenfield areas requiring significant infrastructure investments to enable development that would otherwise never occur. They can be a useful tool, but I think are overused and subject to abuse.

I think some of the TIF projects, such as the City Center, are ok. But the city has gone overboard by TIF’ing out Gramercy. If this is such a wonderful project, then it should financially work on its own without a $20 million contribution from the city. The idea that this is only for infrastructure is a red herring as in most subdivisions the developer is expected to supply that – and in some locations in Indiana even pay an impact fee to the local government – not the other way around.

What’s more, in areas that are experiencing some growth, TIF’s capture the “natural increase” in the tax base, robbing schools and other districts of money. The money in the TIF is also a sort of off the books slush fund. The public can find out about TIF revenues and spending, but it is not as straightforward as just looking at the city budget.

Carmel may have needed TIF’s to jump start redevelopment in the core and rejuvenate Old Town and I’m fine with that. But the days of TIF utilization in Carmel should be over.

3. The nostalgia based New Urbanist designs are not compatible with the notion of an Arts and Design District. To be blunt, if you want real, practicing, leading edge arts, then the Carmel aesthetic is not going to attract it. I think what you’ll see is pseudo-art and design. Go to the bookstore and pick up any magazine on design – say, Wallpaper – and when you see things like what are displayed in there showing up in Carmel, call me. I should also mention I think those cheesy Seward sculptures make me want to vomit.

Carmel has copied a lot of its development from other places using a sort of cook book approach. That’s ok, now we have to see how the recipe comes together. Right now Old Town is still a bit of a pastiche of a downtown, a bit too Disney. As development continues, it needs to gel into a real neighborhood.

4. Roundabouts are nice, but not all of them are designed well. In particular, even I find the multi-lane roundabouts confusing to drive. I’d rather see real intersections at those types of major crossroads.

5. The Meridian corridor is being built out at too low of an intensity of use. With most buildings fairly low rise at five or so stories, the corridor will be built out from a land perspective before it reaches its commercial potential. Carmel says it wants to be an edge city. Well, real edge cities have about three times as much office space as Carmel and normally have mid to high rise buildings. They look a lot more like Keystone Crossing offices than what’s in Carmel now. Take a look along the Atlanta Perimeter to see what I’m talking about. With the US 31 freeway upgrade and and excellent collector/distributor road system, the Meridian corridor can be built out at much higher densities than it is.

I know the mayor doesn’t like buildings over eight stories and there would likely be opposition from adjoining areas which might not like the shadows from higher rise construction. But as Carmel approaches buildout, it needs to start maximizing space. I’d suggest eight stories as a minimum along US 31 itself.

So I think there are things the city could definitely be doing better. But this needs to be seen in the context of a city that is doing most things right and is very forward thinking in its views in a state that is hyper-conservative and which has been falling behind the nation for some years now. Carmel is showing the path on how to make Indiana a more desirable place to live, which is ultimately how the state wins the battle for residents and businesses. Low taxes and cheap land aren’t enough. If that were the case, Indiana would already be the hotbed of growth. It takes more than low end, cheap approaches to lure people who have a choice about where to live. Carmel has decided who its target market is, and is executing a strategy to reach them. Other towns in the region have stood up and taken notice and are now trying to do a lot of similar things. Arguably it is Carmel, not Indianapolis, that is now looked to as the regional model. As a leader, Carmel now has followers. It shouldn’t come as any surprise that the metro area is now officially known as the Indianapolis-Carmel metropolitan statistical area.

Carmel and Mayor Brainard are to be congratulated on what they’ve accomplished. There’s still a long way to go to achieve the vision, but so long as the citizens of Carmel remain supportive, the city is on the right track to get there.

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You’ve obviously put a lot of thought into your analysis of Carmel. It is very well thought out. Have you ever considered whether it makes sense for a community which prides itself in being on the cutting edge to still permit the lawful discrimination of people in housing, employment and public accommodations on the basis of their sexual orientation?

In response to the previous comment…I think there is a difference between being progressive when it comes to city planning and being socially progressive. Carmel has never claimed to be socially progressive; in fact the opposite: Carmel is conservative, as evidenced by the “safe” and “classic” architectural styles adopted by the city. This isn’t defending Carmel from permitting lawful discrimination, but rather defending them from claims of hypocrisy.

Presumably Carmel doesn’t have an anti-discrimination ordinance that includes sexual orientation. This isn’t really the topic of my blog, but a few thoughts.

If Carmel wants to have an arts and design community, it had better be welcoming of gays. Otherwise not only does it lose the gay artists and designers themselves, but also turns off most of the rest of the arts community. That’s something the mayor should keep in mind.

I’m not sure I buy into this whole “creative class” idea, but for Carmel to want to be a true edge city instead of just a typical suburb, at least some of that has to be there and gays are a big part of it, directly or indirectly.

I’m not aware that there has been a problem with people refusing to do business with gays in Carmel. Have you heard of such things happening there?

I do think it is fair to say that Carmel is not a leader when it comes to social policy items outside of an urban planning context. They aren’t banning discrimination against gays, passing ultra-tough recycling regs (though the mayor has bought hybrid cars and is investigating wind power), looking at food issues such as trans-fat, etc. It’s arguable whether some of these should even be municipally driven items, but if the city wanted to be a leader in them, it could certainly take them on.

Your comments about the Mayor’s collection of the vast majority of his campaign funds from those doing business with Carmel misses the point.

The funds the Mayor collects in his Campaign funds war chest are SPENT in two ways. First, he pays most of it to the firm (Stakeholder, Inc.)that employs Carmel City Councilor Ron Carter. This is obviously a Conflict of Interest for Councilor Carter since he was elected to represent the taxpayers of the City, not the developers and the Mayor. The Mayor shouldn’t be funneling money to Ron’s firm, period.

Second, the Mayor has “loaned” himself money from his campaign funds. You state that this is not illegal or unethical but I think it is both since $50,000 was just one such “loan.”

This is very easily confirmed from your blogging easy chair. Just go to the Hamilton County government website and review Jim Brainard’s campaign finance reports since the last election (May 2003.)

About Aaron M. Renn

Aaron M. Renn is a Senior Fellow at the Manhattan Institute and an opinion-leading urban analyst, writer, and speaker on a mission to help America’s cities thrive and find sustainable success in the 21st century. (Photo Credit: Daniel Axler)